Figures show more current account customers switching

Halifax has been one of the big winners gaining more than 47,000 accountsHalifax has been one of the big winners gaining more than 47,000 accounts
Halifax has been one of the big winners gaining more than 47,000 accounts
The number of current account customers ditching their old bank and switching to a new one has been running at higher levels in 2016 than it was a year ago.

But with several popular current accounts set to slash their interest rates or perks, customers may find they have a poorer choice of alternatives to switch to in the coming months, experts have warned.

Some 802,036 customers switched current account between the start of January and the end of September, marking a 3% increase compared with the same period in 2015, according to new figures from payments body Bacs, which oversees the switching service.

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Launched in September 2013, it has taken some of the hassle out of moving current accounts and has cut the length of time it takes to switch from up to 30 working days to seven.

Bacs said over 3.3 million switches had taken place since the scheme was launched. A total of 1.06 million switches were completed in the last 12 months, up 2% on a year earlier.

The perks and relatively high interest rates offered by some current accounts have given savers a haven for their cash at a time when returns on traditional savings accounts have been poor.

But, following the recent cut in the BoE base rate to 0.25%, some providers have confirmed they are cutting their perks or chopping their rates.

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Santander, seen as one of the big “winners” of the switching service, announced in August that it would halve an interest rate on its flagship 123 current account from 3% to 1.5%, from November 1.

Bacs’s latest figures show that in the first quarter of 2016, Halifax made a net gain of over 47,000 customers using the switching service, while Nationwide Building Society piled on over 28,000 customers, Santander gained over 17,000 customers, HSBC gained more than 5,000 customers and TSB gained more than 4,000 customers.

Barclays made a net loss of more than 34,000 customers, NatWest lost more than 22,000 customers and Lloyds Bank lost more than 18,000 customers.

Locally the figures report losses by AIB Group UK (-837); Bank of Ireland (inc Post Office switches) (-590); Danske (-745) and Ulster Bank (-1,409).